Fact Check: How Many MGNREGA Wage Arrears Did the Government Really Clear?

Sanction orders on the NREGA website revealed that amounts released towards end-March were geared towards clearing outstanding materials and administrative expense dues.

How much of the Rs 6,000 crore pending wages as of March 28, 2020 – owed to unskilled workers under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) – did the government really clear as of end-March, which would have come as a lifeline to millions struggling to make ends meet during the COVID-19 pandemic?

On March 27, the day the finance minister announced a Rs 1.7 lakh crore package, the media widely carried an agency report which quoted unnamed officials, stating that an amount of Rs 4,431 crore had been released by the Ministry of Rural Development that week to states for clearing wage payments. Moreover, these reports said, “the government will clear all pending wages under the employment guarantee scheme amounting to Rs 11,499 crore by April 10.”

If there was an official letter to that effect issued by the Secretary, Ministry of Rural Development, Government of India to all states and union territories, it is not to be found on the ministry’s website yet.

An official Press Information Bureau release on March 31, 2020, however, is available. This release states that the amount was aimed at clearing both, wage and material arrears:

“Ministry of Rural Development is according top priority to liquidate the wage and material arrears. An amount of Rs. 4,431 crore has been released in this week to various States/UTs to liquidate these liabilities of current fiscal year and the remaining such liabilities along with 1st tranche for the year 2020-21 will be released before 15th April, 2020. An amount of Rs. 721 crore has been released to State Government of Andhra Pradesh.”

Clearly, the media had wrongly reported that the Rs 4,431 crore was towards clearing wage arrears only – this amount included material arrears, as per PIB’s release.

Also read: Once Derided by Modi, Boost to MGNREGS Shows it’s One of Rural India’s Few Safety Nets

But the story doesn’t end here.

In a fact check with the official NREGA website, this writer came across a bunch of 27 sanction orders issued to as many states/Union territories all on the same date – March 23, 2020 (except for Andhra Pradesh, which was made on March 30). All of these, save the ones to Jammu and Kashmir, Arunachal Pradesh, Manipur, and Nagaland, were specifically towards meeting pending liabilities of material and administrative components. Wages were included only in the four states mentioned.

The individual amounts sanctioned to clear arrears in each of these orders add up to Rs 4,388 crore – in other words, close to the Rs 4,431 crore reported in the media on March 27. Which means this entire amount went to clear outstanding materials and administrative expense dues, and not wage arrears of unskilled workers.

The Rs 721 crore paid to Andhra Pradesh as mentioned in the PIB release, was also towards pending material and administrative liabilities only.

This is not to say that the government has not paid wage arrears. Multiple wage sanctions were made to states in the last weeks of March and continued in April and May. However, other than specifying amounts re-released on account of ‘failed transactions,’ (for instance, see here), these sanction orders do not bifurcate what part is meant for works in the current fiscal year, and how much for clearing wage arrears.

Things become even more confusing, if one does manage to find the wages due figure for unskilled workers in the official MGNREGA website.

This number manifests in the ‘Outlays and Outcomes’ head under financial progress section in the MIS reports tab. Accessed on May 19, it shows that only Rs 2,536 crore was spent on ‘liabilities of previous years’ of unskilled workers for the entire fiscal 2020.

The ‘outlays and outcomes’ for fiscal 2021 shows another Rs 1,214 crore was spent towards meeting wage arrears in the current fiscal so far.

Which means only about Rs 3,650 crore (Rs 2536 crore + Rs 1214 crore) has been released till date to clear wages of unskilled workers, since the pandemic has hit.

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But this again contradicts the figure put out in the ‘financial statement’ under financial progress section in the website. According to this, only about Rs 797 crore remained as dues to be paid to unskilled workers as of end fiscal 2020 and this had shrunk further Rs 457 crore in the current fiscal, as of May 20, 2020.

To make matter worse, the media reported the rural development minister Narendra Singh Tomar as saying on April 15, “Government has cleared all pending payments of Rs 7,300 crore to beneficiaries under MGNREGA.”

Again, if this referred to the remaining amount as reported on March 27 (Rs 11,499 crore – Rs 4,431 crore) – it would not be only towards wages but also materials arrears?

None of the government announcements clearly state the amount of unskilled workers’ wage arrears cleared.

If all this is not bewildering enough, the minister on DD News on April 30th is reported to have said, “Rural Development Ministry has also sanctioned Rs 33,300 crore under MGNREGA out of which Rs 20,624 crore has been released to liquidate all outstanding dues of previous years towards wages and material.” If all the dues have indeed been paid, then what is this huge arrears bill of Rs 20,624 crore that needs clearing?

Further, claiming that arrears have been paid is one thing, and workers receiving them is quite another, given the numbers of issues in electronic payments. Noted economist-activist Jean Dreze has time and again pointed out how linking MGNREGA payments to the Aadhaar Payment Bridge System has only worsened payment delays – as if adding insult to injury for the workers. He has also stressed how important it is to break “the vicious cycle of wage arrears” to improve the efficacy of the scheme.

Instead of a ‘whatever-it-takes’ approach, the finance minister has announced a hike in the MGNREGA outlay by Rs 40,000 crore on May 17. The ‘real increase’ would only be about half of that: the amount budgeted for this fiscal was nearly Rs 10,000 crore lower than the previous year’s budget and another Rs 10,000 crore or so would have gone to meet previous years’ arrears.

That’s a paltry increase for a scheme that is the only standing monument welcoming scores of workers heading back home to their villages with a prospect to earn and survive when everything around them is collapsing.

Also read: COVID-19 Lockdown: In April, MGNREGA Work Crashed to Lowest in 7 Years

It is this government’s colossal failure that in times of such an unprecedented humanitarian crisis, it has not yet moved to keep the tap of NREGA funds open for as much as there is demand, increase the number of days of employment, and ensure workers receive their long-delayed dues, even it means trekking to their homes – for that might prove faster than unreliable ‘direct’ transfers that workers never receive.

Sowmya Meenakshi is a freelance writer based in Coimbatore.